Prime Minister Balen Shah Responds to Electricity VAT in Budget

Kathmandu. Prime Minister Balen Shah has responded to the issue of VAT imposed on electricity in the budget for the upcoming fiscal year 2083/84.

On Sunday, while answering questions from MPs in Parliament, Prime Minister Shah responded to the issue of VAT imposed on electricity. Prime Minister Shah stated that the provision of imposing a 5 percent VAT on electricity consumption exceeding 50 units has been made to mobilize the necessary resources for the expansion and upgrading of electricity infrastructure across the country.

Khusbu Oli, a Member of Parliament from Rastriya Prajatantra Party (RPP), had questioned about the VAT imposed on electricity. In response to Oli's question, Prime Minister Shah said, 'If every kitchen in the country starts cooking with electricity, many transformers and substations will not be able to handle the capacity. Therefore, investment is necessary for infrastructure expansion and upgrading.'

According to Prime Minister Shah, the government has made a provision through the budget to impose a 5 percent VAT on consumers who consume more than 50 units of electricity. He said that the amount collected from this tax will be spent on enhancing the capacity of transformers, transmission lines, and substations.

'A VAT of 5 rupees will be levied on a bill of 100 rupees. That amount will be used to upgrade transformers across the country, increase the capacity of transmission line wires, and improve substations. Only after these infrastructures are strengthened can Nepal truly enter the era of electricity.'